“a Cultural Mismatch”

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Chapter Nine
(Organizational Design, Culture, and Change)
Application Case:
“A Cultural Mismatch”
1)Based on the experiences of Chrysler and Diamler-Benz AG, what is the importance of culture in the change process? Culture effects performance! Each structural culture operates differently; in order for them to properly function they must combine their processes. These processes would include management styles, pay structures, capacity to communicate, compromise, understanding and accepting different cultures, conforming to meet planned goals, the ability to maintain and meet a new combined culture and working structures. An organizational culture’s effectiveness is determined by: coherence, persuasive and depth, and adaptability to the external environment. The degree of which is fit with the external environment is perhaps the most crucial. If these processes and structures are not aligned than the merger will be unsuccessful.

2)What specific cultural factors caused problems in the change process? Cite examples to support your answer. Failure in efforts to collaborate in a merger with different structures in opposite cultures seems to be the biggest problem with this situation. “Diagnosing the problem” which was: Chrysler valued efficiency, empowerment, and fairly egalitarian relations among staff; whereas Daimler-Benz seemed to value respect for authority, bureaucratic precision, and centralized decision-making. Another key issue at DaimlerChrysler-Benz was: the differences in pay structures between the two pre-merger entities. Germans disliked huge pay disparities and were unlikely to accept any steep revision of top management salaries. But American CEOs were rewarded handsomely. Germans and Americans also had different working styles. The Germans were used to lengthy reports and extended discussions. On the other hand, the Americans performed little paperwork and liked to keep their meetings short. Americans favored fast-paced trial-and-error...
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